Union Budget likely to launch Stand-Up India II with higher loan limits
NEW DELHI : The Union Budget, to be presented on February 1, is expected to unveil Stand-Up India II, a revamp of the existing scheme that will raise the maximum loan size beyond the current Rs 1 crore, government sources said.
The redesigned programme is aimed at widening the scheme’s reach, especially among very small and first-generation businesses, and supporting job creation at the grassroots.
“The budget will roll out Stand-Up India II with likely maximum loans of up to Rs 2 crore, which will significantly improve access to credit for small businesses,” a government source told Moneycontrol. The move is meant to build on past achievements by facilitating larger credit flows to first-generation entrepreneurs from under-served communities and women.
With Stand-Up India II, policymakers want to retain the scheme’s core eligibility rules while ensuring that businesses which succeed in their early years are not forced to stall for lack of finance as they try to grow.
Under the Stand-Up India scheme, scheduled commercial banks (SCBs) provide loans ranging from Rs 10 lakh to Rs 1 crore to eligible entrepreneurs from scheduled caste (SC), scheduled tribe (ST) and women categories to set up greenfield enterprises in manufacturing, services, trading or allied sectors.
The revamp is expected to address a long-standing gap in the credit ladder. Many early-stage firms manage with smaller loans in their initial years but struggle to find formal finance when they need larger sums for expansion, equipment purchases or working capital.
“Increasing the loan ceiling will enable many early-stage enterprises to invest in capacity expansion, technology adoption and working capital without resorting to informal credit,” the government source said.
At the Global Inclusive Finance Summit on January 13, M Nagaraju, secretary in the department of financial services, said the government is “trying to revise the Stand-Up India scheme” to offer larger loans and widen its reach, particularly for SC and ST beneficiaries.
Change is overdue
Despite steady growth under Stand-Up India, sources said the of Rs 1 crore ceiling is no longer sufficient for many businesses that have moved beyond the start-up phase but are still too small to attract mainstream corporate financing.
“Micro units often face a funding cliff once they reach thresholds where small-ticket finance ends and institutional credit becomes harder to secure,” he said. Stand-Up India II is expected to help smooth that transition by allowing such firms to borrow more without changing the scheme’s basic structure.
Nine-year footprint
Since its launch on April 5, 2016, the Stand-Up India scheme has focused on bridging credit gaps for SC, ST and women entrepreneurs by facilitating institutional bank loans and fostering inclusive entrepreneurship across India.
According to government data, total sanctions under the scheme rose from around Rs 14,431 crore in late 2018 to over Rs 61,020 crore by March 17, 2025, reflecting its expanding reach.
Participation has increased sharply across target groups. Between November 2018 and November 2024, the number of accounts held by SC entrepreneurs grew from 9,399 to 46,248, and those by ST entrepreneurs from 2,841 to 15,228. Women entrepreneurs saw the biggest rise, with accounts increasing from 55,644 to 1,90,844 in the same period.
What Stand-Up India does
The original Stand-Up India scheme was designed to provide inclusive access to formal credit by ensuring at least one SC or ST borrower and at least one woman borrower per branch of SCBs .
Loans are meant for greenfield enterprises, with the applicant required to hold a controlling stake. They are usually composite in nature – combining term loans and working capital – and cover manufacturing, services, trading and activities allied to agriculture.